To grow in this expensive environment, some buyers are turning to lease-to-purchase deals. Andrew Montgomery of Montgomery Intermediary Group closed on such an agreement for a skilled nursing facility with 60 beds in Missouri. The seller was looking to focus on assets closer to home and slated this location for divestment. The buyer is a growing owner/operator that is expanding their footprint in the region and plans to acquire the community within 12 months. Owning a medical supplies company that services over 1,000 nursing homes, including his own, the buyer has targeted similar deals in the last year, identifying smaller towns that other groups tend to avoid due to their size. Buying in a lease-to-purchase structure frees up equity for the buyer to keep growing at a decent pace and shows the eventual lender a track record of operational improvement (hopefully).
Montgomery also facilitated the sale of a residential care community in Wichita, Kansas. The community comprises 30 beds in 24 units. The distressed property did start to improve operations prior to closing as the owner continued to raise rates. The community also cares for more high-acuity patients, which led to higher staffing and care costs. The buyer, a growing owner/operator based in Kansas, plans to operate with a lower-acuity resident type and will provide memory care services. The deal closed within five months of listing.
